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Mr. St. Aubyn: The hon. Gentleman has made it clear that he believes that there is an optimum level for the tax burden. He harried my right hon. Friend the Member for Charnwood (Mr. Dorrell) for not saying what he thought that level should be, but the hon. Gentleman must know his own preference. Will he say what, according to Liberal Democrat policy, is the optimum level of the tax burden?
Mr. Davey: I certainly do not think that it is 0 per cent., which is the figure to which the logic of the Conservative party and its tax guarantee would lead. The right hon. Member for Charnwood failed to answer my question on that point, but we at least have been clear about our tax policies. Unlike the Conservatives, the Liberal Democrat party publishes alternative budgets and has a very good record about being up front about its policies.
It is possible that, between now and the next general election, the Chancellor will announce a cut in the standard rate of income tax to 20p and a widening of the 10p band. He might introduce such tax cuts just to shoot the Tory fox. That would be a real mistake. Perhaps it illustrates the significance of the defection from Conservative to Labour of the hon. Member for Witney (Mr. Woodward) who was, after all, famed for his tax bombshell campaign in 1992. The Chancellor, not content with stealing the Tories' clothes on tax, wants to pinch their tailor too. The Liberal Democrats have their own tailor, in the shape of my hon. Friend the Member for Truro and St. Austell and had no need of the hon. Member for Witney.
We believe that it would be wrong for the Chancellor to respond to Tory attacks by slashing income tax rates. It is not the country's priority.
Mr. Kidney: It is very decent of the hon. Gentleman to give way. I suggest that there is another restraint besides political judgment--that is, the response of the independent Bank of England and the Monetary Policy Committee to any tax cut or increase in public spending.
Mr. Davey: The hon. Gentleman is exactly right. That is why I talked about the constraint of macro-economic stability in my opening remarks.
There are no real constraints on a targeted, modest increase in public expenditure. There is no doubt that our schools and hospitals need it; our police services certainly
need it. Macro-economic stability would not be prejudiced so long as the spending increases were not accompanied by large tax cuts. Public finances are healthy, so the Chancellor can afford to make that extra investment. With the Tories imploding, there is no political need to shoot the tax fox.The Liberal Democrats hope that the Chancellor has the courage of his deeply held convictions and does not simply thank those working in the public sector, as the last line of the motion says, but gives them his full support by investing in them.
3.32 pm
Shona McIsaac (Cleethorpes): Listening to all the theories being bandied about in the debate, I am beginning to get an inkling that the Tories have forgotten everything that they did prior to May 1997. Their record was woeful.
At the start of 1997, there was a huge debate and campaign about the future of the hospitals in my area. The Grimsby Evening Telegraph said on 26 April 1997--the Tories had brilliant timing--that Grimsby hospital could be downgraded to a cottage hospital. That was what we were facing--devastation of local health services. Those plans were shelved and considerable extra investment has been made in that hospital. In May 1998, it was announced, thanks to the Labour Government, that Grimsby hospital was to have a brand new state-of-the-art maternity and children's unit. That investment came to £8.5 million.
This is the crux of the debate; never mind the theories about taxation and public expenditure, it is what is done with the money that counts. As I said before, the Tories' record on public expenditure was woeful.
The Tories claim that waiting lists are soaring, yet at my hospitals waiting lists are coming down, thanks to extra investment. They are ahead of target in reducing waiting lists. As the hospitals have confirmed to me, neither is there a problem with out-patient waiting lists. They too are coming down. In addition, NHS Direct was recently launched in our area, and it has been a considerable success. If we compare what was happening in the early part of 1997 with what is happening now, there is a big difference in the provision of health care.
People should be warned about Tory public spending plans. The spectre hovers over us again of hospital closures and of people being forced to go private for all but the most essential health care. If the Tories ever came to power again, what would they get rid of in public expenditure? Would they save £8.5 million by scrapping the new maternity unit in my area? Would they scrap the new renal unit as well? Would they scrap the extra investment in breast cancer care? The Tories must face up to those issues in any debate on public expenditure.
Mr. St. Aubyn: Would the hon. Lady join my campaign for more equitable health service funding in areas such as west Surrey, whose health service provision is being cut to finance some of the improvements in her area? Does she regard that as fair and equitable for the poor and the sick of West Surrey?
Shona McIsaac: Perhaps the hon. Gentleman is just not a very good campaigner. On the south bank of the Humber, local Members of Parliament have secured considerable extra funding for their hospitals. We are
excellent campaigners and have good relations with our Health Ministers. Perhaps if the hon. Gentleman were a little less hostile, he might get further in his campaign.My predecessor in the constituency managed to insert in the Police Act 1997 a provision to change the name of the local police force. That simple name change was estimated to cost £1 million--a sum that would have been far better spent on proper policing and catching criminals in the area. In June 1997, my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Michael) wrote to me saying that he was not minded to implement that part of the Police Act. No doubt if the Conservatives had won the general election, they would have gone ahead with such a change, which would have cost my police force dear. That again shows the difference between what was happening then and what is happening now.
The Government's spending plans have also benefited pensioners, and we accept that more will be done in the future. Some 16,000 pensioners in my constituency benefit from free eye tests and the winter fuel allowance. Some 3,000 of the poorest pensioners are now better off with the minimum income guarantee, and 6,000 pensioners will benefit from entitlement to free television licences.
It is all about people, and the difference that we can make to their lives by putting a few extra pounds in their pockets. At this time of year, when most people's concept of public expenditure is buying Christmas presents, I think that my constituents are probably happy to have a few extra pounds in their pockets. I have received a number of letters from pensioners saying so. Mr. Leeman of Cleethorpes says that it is good news about the winter allowance going up and about the free television licence for those over 75. Mr. Leeman says that he has also noted the free eye tests and the reduction in VAT on gas and electricity. That was one of the most hated taxes introduced by the previous Government, and it penalised pensioners in particular. We should not hesitate to remind people that the Tories introduced that tax and were happy to see it rise to the top level. We have reduced it, and that benefits people on low incomes in particular.
Opposition parties are always coy about admitting that we have increased child benefit. It helps more than 13,000 families in my constituency. If we are doing that in Cleethorpes, we are helping many more families in every constituency around the country. The Tories never mention that. They have said that they are minded to target child benefit at the under-fives. We should not hesitate to remind pensioners of what the Tories are up to, and we should remind every family that voting Conservative in future would risk the loss of child benefit.
Another measure that benefits families is the working families tax credit. Yet again, the Tories are not happy about it. In most constituencies several thousand families will be, on average, £1,000 or more better off every year. We should warn the people--give them a Tory warning, as it were--that they will risk losing that money if they dare ever to support the public spending plans proposed by the Opposition.
We have been particularly strong on education. My maiden speech was about education and class sizes. Schools in my constituency had classes of more than 40 pupils because of the lack of funding the Conservatives gave to the former Humberside county
council. Since then, class sizes have come down. North Lincolnshire--one of the authorities that serves Cleethorpes--has reduced class sizes a year ahead of target. We are right to use the motion to praise those in the public services who have worked hard to help the Government to achieve our targets.The Conservatives have made somewhat barmy pledges. Will they tell my constituents what they would cut in order to meet their education pledges? Will they take back the extra books that we have given? Will they rip out the extra computer equipment? Will they knock down some of the extra buildings? Parents should be told exactly what the Tories would scrap. Tory education spending plans are not sustainable. Teachers' representatives in my area have called them a recipe for chaos. We should warn the people what support for the Tories would really mean for education funding.
We have heard today about the tax burden. Part of it was the windfall levy on privatised utilities. That money is funding the new deal, which has a real impact on people's lives. Unemployment statistics for Cleethorpes are dramatic. The new deal for the under-25s has brought a 73 per cent. reduction in unemployment for that age group. The number of long-term unemployed is down 67 per cent. The overall unemployment rate is down 27 per cent. What is done with the money is what counts. The Tories did not support the new deal, and they have consistently said that they would scrap it. What would that mean for all the people who now have a future? Would the Tories consign them to the scrap heap? The people should be told.
Anyone who dares support the Conservatives in future will run the risk of devastating our health service, reducing funding to our schools, losing jobs and returning to boom-and-bust economics. Pensioners would lose out. The Tories are, simply, fiscally irresponsible.
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